Indian Oil Corporation to reduce prices if global crude rates dip

NEW DELHI: State-run Indian Oil Corp will use the first available opportunity to cut petrol rates if international crude rates dip, chairman RS Butola said after widespread criticism of the Rs 3 increase in petrol prices.

Petrol prices were raised on Friday on rising international prices and depreciating rupee. International crude prices have risen in recent weeks because of the volatile situation in Libya. The average price of the Indian basket of crude oil has risen to $110.68 this month, up from an average of $107.24 in the past two weeks.

"We are very eagerly waiting for the opportunity to reduce petrol prices. I hope that global crude prices will decline after global supply situation improves," Butola told ET. He said besides some disruption in crude output from the North Sea, the crisis in Libya had disrupted daily supply of at least 1 million barrels of sweet crude and oil producing nations are trying to augment their production to meet the shortfall.

State oil firms have been criticised for not reducing petrol prices since January 2009 although crude oil has fluctuated. However, Butola said PSU oil firms acted in a "responsible manner" while using their freedom to pare retail prices of petrol with market rates.

"In May we had raised petrol prices by Rs 5 a litre while as per market rates, the increase should have been Rs 10.5 a litre. IOC alone has incurred a revenue loss of Rs 1,129 crore in the first quarter for keeping petrol prices below market rates to save consumers from steep hike," Butola said.

He said that despite 3.14 a litre hike, IOC is incurring a revenue loss of 62 paise.